Ethiopian retenders for third time to buy imported wheat

ADDIS ABABA, ETHIOPIA — The Ethiopian government recently retendered for a third time to buy 400,000 tonnes of imported milling wheat for the country’s bread subsidy program, according to a May 22 Global Agricultural Information Network (GAIN) report from the U.S. Department of Agriculture. Delivery is expected to begin in August.

According to news sources, the second tender was canceled in late April because of a technical discrepancy with the lowest offer. The bid from Promising International at roughly $248 per tonne was said to have failed because it didn’t include a comparison freight quote using the government-run shipping lines, the report said.

The USDA said the delayed procurement and arrival of the tendered wheat, which originally was scheduled to arrive in the country this past January, has contributed to subsidized bread shortages in the nation’s capital. As a result, some bakeries have started cutting back on production.

To address the situation, the government is said to be considering different interventions, such as drawing stocks from the country’s strategic grain reserve and accelerating the delivery date of the current tender, the USDA said. However, the specifics remain unclear.

“In the meantime, the shortages appear to have put upward pressure on non-subsidized, local wheat prices, which are currently running between $550 to $620 per tonne,” the USDA said. “Only designated flour mills, mostly in and around the capital city, can buy the subsidized wheat from the government at a discounted price, mill the wheat, and then sell the flour at a fixed price to select bakeries in Addis.”